Update on Definition of Large Institutional Investor in Housing Bill

On the evening of March 2, 2025, the 21st Century Road to Housing Act currently before the Senate (hearing on March 4, 2026) was modified to include additional legislative items. Notably, the definition of a "large institutional investor" was included. This follows the Executive Order from January 20, 2026, entitled, “Stopping Wall Street from Competing with Main Street Buyers”. Wherein, the Administration directed the Secretary of the Treasury in consultation with the Assistant to the President for Economic Policy, “to develop definitions of large institutional investor and single-family home for the purpose of implementing this order, which other executive departments and agencies (agencies) may adopt as required for such implementation.”

The legislation now defines a large institutional investor as an entity that directly or indirectly has investment control of at least 350 single-family homes in the aggregate. It is important to highlight that the current proposal seeks to exempt foreclosures from this definition. Please find the relevant excerpts from Section 901 below. Please note that this legislation is not yet final. This information is being shared by PLG for informational purposes only.

Relevant Excerpts below:

TITLE IX—HOMEOWNERSHIP FOR MAIN STREET AMERICA

SEC. 901. HOMES ARE FOR PEOPLE, NOT CORPORATIONS:

(2) EXCEPTED PURCHASE. —The term ‘‘excepted purchase’’ means any purchase of a single-family home that is (relevant part below, does not include the full excepted purchases):

(G) undertaken by a mortgage servicer, lender, or other entity that has a legal right to a single-family home, for the purpose of loss mitigation or compliance with servicing or investor obligations, and not as a long-term investment strategy, and is solely as a result of—

(i) a foreclosure.

(ii) a deed-in-lieu of foreclosure;

(iii) enforcement of a mortgage, deed of trust, or other security interest; or

(iv) operation of law following borrower default;

Definition of Large Institution Investor per the Act:

1. means an investment fund, corporation, general or limited partnership, limited liability company, joint venture, association, or other for-profit entity that is a legal entity structured in a manner that is not aforementioned that—

1. is engaged, in whole or in part, in the business of investing in, owning, renting, managing, or holding single-family homes; and
2. alone or in concert with 1 or more other entities, beginning after the date of enactment of this Act, directly or indirectly has investment control of not less than 350 single family homes in the aggregate, not including any single-family home purchased in an excepted purchase made after the date of enactment of this Act; and
3. does not include any local, State, Tribal, or Federal government entity or instrumentality thereof.

PROHIBITION ON PURCHASES BY LARGE INSTITUTIONAL INVESTORS:

• IN GENERAL. —No large institutional investor may purchase, or enter into a contract to directly or indirectly purchase, any single-family home.

EXCEPTIONS:

• The prohibition under paragraph (1) shall not apply to:
• A) any excepted purchase; or
• (B) any purchase of a single-family home in connection with a restructuring or other reorganization of ownership of single-family homes that were owned or purchased on or before the date of enactment of this Act,

Other Relevant Definitions:

• SINGLE-FAMILY HOME:
• The term ‘‘single family home’’:
• (A) means a structure that contains 2 or fewer dwelling units that are each intended for residential occupancy by a single household; and
• (B) does not include a manufactured home, as defined in section 603 of the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5403).

• PURCHASE:
• The term ‘‘purchase’’ includes any purchase, transfer, or other acquisition of a single family home, including through mergers, acquisitions, construction, foreclosures, or bulk purchases, whether or not for cash consideration.

Relevant Links below:

Bill Text: C:\Users\MIR\AppData\Local\Temp\MIR26311.loc

Section by Section Analysis: final